Brokers up and down Australia have been busy once again reassessing new data and readjusting their discounted cash flow models accordingly.
Three shares that have come out of this favourably are listed below. Here's why they have been given buy ratings:
Carsales.Com Ltd (ASX: CAR)
According to a note out of Morgan Stanley, its analysts have retained their overweight rating and $16.00 price target on the car listings company. The broker has held firm with its rating while acknowledging that Carsales' dominance in Australia could be disrupted by CarGurus if it were to launch in our market. The US-listed rival has not stated any intention to launch in Australia, but after expanding into Canada, Germany, and the UK, it seems inevitable that it could look towards our shores for growth in the future in my opinion. I think it would be worth shareholders keeping an eye out for any developments.
Smartgroup Corporation Ltd (ASX: SIQ)
A note out of Morgans reveals that its analysts have retained their add rating but slightly reduced the price target on the salary packaging and fleet management company's shares to $11.60. Morgans appears to be pleased that Smartgroup's gearing position has improved greatly after the successful completion of a $75 million placement and $15 million share purchase plan. Morgans estimates that this gives the company the ability to make acquisitions that could add up to $30 million in operating earnings. While I agree with Morgans that it could be a buy, I think there are better value options in the industry.
Whitehaven Coal Ltd (ASX: WHC)
Analysts at UBS has retained their buy rating and lofty $5.35 price target on the coal miner's shares. The broker has released the note in response to speculation that Whitehaven Coal could be interested in acquiring the coal assets of Rio Tinto Limited (ASX: RIO). UBS believes that a price of US$2 billion for the assets would be highly accretive to the coal miner's earnings in FY 2019. I think UBS is spot on with this assessment. However, it is only speculation at the moment and I think investors ought to keep their powder dry until the situation develops further.
